Latest FERC DRAM Report Highlights Cases for Growth of Demand Response

The Federal Energy Regulatory Commission’s (FERC’s) 2019 Assessment of Demand Response and Advanced Metering (DRAM) report indicates that advanced meters passed the tipping point and made up the majority of US operational meters in 2017. Released in December 2019, the report uses annual penetration rates to estimate the potential for demand response (DR) in the retail and wholesale markets. While omitting policy or regulatory suggestions, the FERC uses publicly available data to objectively examine the DR and advanced metering infrastructure (AMI) landscape. Regulators, implementers, and utilities looking to the data-rich DRAM report can note several trends across US DR programs. 

Broad-Based Support for AMI 

Evidenced by the 51.9% penetration rate for advanced meters in 2017, the DRAM report notes that regulators nationwide are demonstrating a preference for the deployment of advanced meters. States like Arkansas, Kansas, Missouri, and Montana, among states more traditionally associated with grid modernization and demand side management program development, are showing support for AMI exploration and deployment. Actions at the state level demonstrate continued interest in improving security associated with AMI data collection, promoting customer education, and addressing customer health and safety concerns with regard to advanced metering.

The DR Resource Mix Is Changing 

The North American Electric Reliability Council (NERC) uses its Demand Response Availability Data System to measure, in part, the degree to which DR will reliability perform to aid in dependable grid operations. NERC’s findings are summarized in the DRAM report, and the organization continues to state the use of DR programs will support electric reliability across the bulk power system. NERC notes that distribution planning, reliability standards, and market design may need to adjust to address a changing resource mix that includes growing natural gas generation, renewable generation, and energy storage. 

Dynamic Pricing Programs Show Promise for Growth

FERC also reports that time-based rate programs (time-of-use, or TOU), sometimes referred to as economic DR, are being used to take advantage of AMI investment and integrate distributed energy resources like the growing numbers of EVs and behind-the-meter storage. The report notes that customer enrollment in time-based rate programs grew by 6.9% between 2016 and 2017 at the national level. While some regions did experience a decrease in TOU programs, Hawaii, Midwest Reliability Organization, and Western Electricity Coordinating Council drove national growth rates. 

One Resource Among Many Indicating Growth of DR

Several tables throughout the DRAM report indicate customer participation is decreasing slightly in retail DR programs. However, this report is just one of many annual snapshots of US programs. SEPA’s 2019 Utility Demand Response Market Snapshot report notes a projected growth of DR capacity through the expansion of conventional programs. The Demand Side Management Overview report from Guidehouse Insights, predicts DR capacity and spending to increase steadily across North America for the next decade. While both reports acknowledge that DR will adapt from its existing form, more geographically targeted programs will prove foundational to non-wires alternatives. Integrated programs incorporate a variety of distributed energy resources, and customer choice is expected to drive higher levels of participation through bring your own device initiatives in both wholesale and retail markets. While AMI provides from moving beyond traditional direct load control programs, evolved forms of DR are here to stay.